OP Bancorp (NASDAQ:OPBK) Is Due To Pay A Dividend Of $0.12

OP Bancorp (NASDAQ:OPBK) will pay a dividend of $0.12 on the 22nd of August. This means the dividend yield will be fairly typical at 3.9%.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that OP Bancorp's stock price has increased by 36% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

See our latest analysis for OP Bancorp

OP Bancorp's Earnings Will Easily Cover The Distributions

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

OP Bancorp has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but OP Bancorp's payout ratio of 35% is a good sign for current shareholders as this means that earnings decently cover dividends.

The next year is set to see EPS grow by 3.6%. If the dividend continues along recent trends, we estimate the future payout ratio will be 42%, which is in the range that makes us comfortable with the sustainability of the dividend.

OP Bancorp Doesn't Have A Long Payment History

It is great to see that OP Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 6 years was $0.20 in 2018, and the most recent fiscal year payment was $0.48. This implies that the company grew its distributions at a yearly rate of about 16% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

We Could See OP Bancorp's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. OP Bancorp has impressed us by growing EPS at 7.2% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for OP Bancorp's prospects of growing its dividend payments in the future.

Our Thoughts On OP Bancorp's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for OP Bancorp that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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